Tuesday, August 21, 2012

Evidence from Two Large Field Experiments that Peer Comparison Feedback Can Reduce Residential Energy Usage

Abstract: By providing feedback to customers on home electricity and natural gas usage with a focus on peer comparisons, utilities can reduce energy consumption at a low cost. We analyze data from two large-scale, random-assignment field experiments conducted by utility companies providing electricity (the Sacramento Municipal Utility District [SMUD]) and electricity and natural gas (Puget Sound Energy [PSE]), in partnership with a private company, Opower, which provides monthly or quarterly mailed peer feedback reports to customers. We find reduction in energy consumption of 1.2% (PSE) to 2.1% percent (SMUD), with the decrease sustained over time (7 months [PSE] and 12 months [SMUD]).

by Ian Ayres* Sophie Raseman** and Alice Shih†
* Yale Law School, Townsend Professor, PO Box 208215, New Haven, CT 06511, USA. Email: Ian.Ayres@yale.edu
**Email: Sophie.Raseman@aya.yale.edu
†Email: Alice.Shih@aya.yale.edu
Journal of Law and Economic Organization Published by Oxford University Press on behalf of Yale University.
First published online: August 20, 2012

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